KHARTOUM, Nov 22 (Reuters) - Sudan arrested its former spy chief and other senior military and security officers on Thursday after foiling what officials said was a plot to incite chaos and target leaders in this oil-producing African state.

Witnesses told Reuters they saw army tanks and armoured vehicles moving down a main street in the centre of Khartoum around midnight, but life in the city was normal during the day with shops in the centre bustling with customers.

Sudan’s President Omar Hassan al-Bashir has kept up a 23-year hold on power, even as a series of uprisings troubled the country’s poor border areas, including the conflict-torn region of Darfur.

But Sudan has been stuck in economic crisis since the south - the source of most of its known oil-reserves - declared independence last year under the terms of a peace deal.

High prices for food have added to widespread public anger over losing the south and have emboldened opposition activists to call for protests. Analysts say the crisis has also exacerbated divisions in the government and squeezed the patronage system they say Bashir has relied on.

(To see a special report on Bashir’s Sudan, please click on ID:nL3E8MD574])

Unrest over price rises and food and fuel shortages has preceded coups in Sudan in the past.

Salah Gosh, former head of Sudan’s powerful intelligence and security agency, was arrested with 12 o thers on suspicion of “inciting chaos”, “targeting” some leaders and spreading rumours about Bashir’s health, the information minister told reporters.

Bashir, 68, has undergone throat surgery twice since the summer. Officials insist he is in good health.

“A lot of evidence was gathered showing there is a movement aiming to incite chaos, target some leaders and undermine the country’s stability,” the minister, Ahmed Belal Osman, said.

“The situation is now totally stable,” he added, naming Gosh, and another arrested officer, Wad Ibrahim, a prominent Islamist in the army.

Some Islamists inside the army and the ruling National Congress Party have said that Bashir and other senior leaders have abandoned the religious values of the 1989 coup and have concentrated decision-making in the hands of a few people.

Some also feel Bashir has been too soft on South Sudan, which temporarily wrong-footed the Sudanese army by seizing a major oilfield during border fighting in April - a shock to many officers.

TANKS HEADED DOWNTOWN

Harry Verhoeven, an Oxford University researcher who has studied Sudan extensively, said the arrests’ timing suggested the incident was connected to a conference of Sudan’s Islamic Movement last weekend that illustrated these tensions.

The Islamic Movement is a part of Sudan’s ruling establishment that counts many of the country’s most powerful politicians as members.

Analysts say reform-minded members of the group were unhappy with the new secretary-general elected at the conference.

The arrest of Gosh - who is not seen as overly close with the Islamists - may have been a signal to the reformists that authorities would not tolerate serious dissent, Verhoeven said.

“I think the key question is what the reformists do. Do they form a new party? Do they stay quiet?” he added.

Officials have cited a plot but have stopped short of saying this constituted a coup attempt.

Witnesses said they saw military vehicles on a major street that runs alongside the city’s airport overnight.

“We saw something unusual in Khartoum ... four armoured vehicles and two tanks on Abeid Khatim Street heading in the direction of downtown,” one witness said, asking not to be named.

Security at the defence ministry, intelligence headquarters and other buildings associated with military and security authorities appeared normal, a Reuters witness in the city said.

Sudan has been plagued by political conflicts and crises for most of its history since independence from Britain in 1956.

Decades of civil war between the north and south culminated with South Sudan’s independence in July last year under a 2005 peace deal.

Tensions in both nations and between the two states have been high since then. The two countries accused one another of incursions in disputed border zones on Wednesday, a setback to recent security and border deals.

Small demonstrations against cuts in fuel subsidies and other austerity measures broke out across Sudan in June but petered out after a security crackdown and the start of the Muslim fasting month of Ramadan.

“PLOTTING LIKE BREATHING”

Gosh was once among Sudan’s most influential officials. As chief of the National Intelligence and Security Service, he headed what is one of the country’s most powerful institutions alongside the army.

Bashir removed Gosh as spy chief in 2009, replacing him with the current head Mohammed Atta al-Moula. Officials did not explain the decision to sack Gosh at the time, but Khartoum political circles widely speculated the former chief was suspected of plotting against Bashir.

A leaked U.S. diplomatic cable from 2008 quoted a government official as saying Gosh had mused about the possibility an International Criminal Court arrest warrant for Bashir could lead some to try to replace the president.

“Conspiracy and plotting is like breathing in Sudan,” the cable noted.

Gosh had been appointed presidential adviser on security affairs, but was also removed from that position last year.

Western rights groups have accused Gosh of complicity in abuses in the country’s Darfur region, which has endured a nearly decade-old insurgency.

But while the ICC has issued arrest warrants for Bashir and other officials on charges of war crimes in Darfur, Gosh has never been indicted.

The former spy chief is also described by historians and analysts as a key interlocutor with U.S. officials when Sudan was cooperating with the United States by providing information on al Qaeda in the years after the Sept. 11 attacks.